Prediction market giant Kalshi has ended its advisory contract with President Donald Trump’s eldest son after his venture capital firm, 1789 Capital, made a significant investment in the prediction market’s chief rival, Polymarket.

“We have mutually agreed to end Don’s advisory role after his firm’s significant investment in a competitor this past summer,” Kalshi spokesperson Dani Lever said in a statement to MS NOW, adding that the company is “grateful” for his early marketing help.

Discussions about ending Donald Trump Jr.’s advisory role at the company began in August, after 1789 Capital made a major investment in Polymarket, according to a person familiar with the decision-making process who spoke to MS NOW on background. This person was granted anonymity because they were not authorized to speak about the decision publicly.

Kalshi officials and Trump Jr. spoke about his firm’s investment and his position on Polymarket’s advisory board this fall, according to the person familiar with the process. They reached a decision to end Trump Jr.’s contractual involvement after mutually concluding that his role as an adviser to both prediction market giants in the rapidly evolving industry is a conflict of interest.

Trump Jr. previously served on the advisory boards of both Kalshi and Polymarket. He holds a large volume of shares in Kalshi, while his venture capital firm, 1789 Capital, has invested heavily in Polymarket. He has publicly denied that his ties to the companies have influenced the Trump administration’s aggressive support for the platforms and or its position in legal disputes involving the industry and numerous states.

Trump Jr. and 1789 Capital did not immediately respond to MS NOW’s request for comment.

In an interview on MS NOW last month, Kalshi CEO and founder Tarek Mansour acknowledged that Trump Jr.’s ties to his company were an “optics issue,” but he said the $40 billion prediction market startup had never used that relationship to win favor with federal regulators.

The Trump administration’s foreign policy decisions over the past year have thrust the pitfalls of prediction market platforms and their potential to facilitate insider trading into the spotlight. Lawmakers in both chambers have sent letters to regulators and introduced a cascade of bills raising concerns about contracts tied to events involving war, violence and death.

Democrats have vowed to impose stricter regulations on the nascent industry after winning control of both the House and the Senate in the 2026 midterm elections.

Sen. Elizabeth Warren, D-Mass., who is poised to become the Senate Banking Committee chair when the new Congress convenes in January, asked the White House in a letter first obtained by MS NOW whether any West Wing employees had placed bets on prediction markets and what safeguards were in place to prevent potential insider trading among staff.

Warren pointed to Gabriel Perez, a White House teleprompter operator who allegedly made $100,000 on Kalshi by betting on words the president would use in his speeches. Perez was fired, fined $173,000 and banned from Kalshi but has not faced criminal charges.

Senators voted unanimously in April to ban themselves and their staff from trading on prediction market platforms amid concerns about insider trading by elected officials. Some House members have also taken steps to ban their staff from using the platforms.

Prediction markets are also at the heart of a battle between states and the Trump administration over who has the power to regulate their operations. The question of whether federally regulated prediction markets platforms must comply with the gambling laws of the states they operate in could be headed for the Supreme Court this term.

States have argued that the platform’s sports-related event contracts constitute illegal betting that violates their gambling laws and siphons valuable tax revenue. But the president has rejected that argument, and the Commodity Futures Trading Commission has taken measures to assert federal authority over prediction markets.

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